{"id":57327,"date":"2026-07-25T13:30:01","date_gmt":"2026-07-25T08:00:01","guid":{"rendered":"https:\/\/financialtelegraph.in\/index.php\/2026\/07\/25\/the-rise-of-health-insurance-and-why-most-indians-still-go-without-it\/"},"modified":"2026-07-25T13:30:01","modified_gmt":"2026-07-25T08:00:01","slug":"the-rise-of-health-insurance-and-why-most-indians-still-go-without-it","status":"publish","type":"post","link":"https:\/\/financialtelegraph.in\/index.php\/2026\/07\/25\/the-rise-of-health-insurance-and-why-most-indians-still-go-without-it\/","title":{"rendered":"The Rise of Health Insurance and Why Most Indians Still Go Without It"},"content":{"rendered":"
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Mumbai (Maharashtra) [India], July 25:<\/strong> Ten years ago, if you were trying to sell health insurance door-to-door in a small Indian town, you\u2019d mostly hear: \u201cWe\u2019ve never fallen sick badly enough to need it.\u201d People talked as if real illness was something distant\u2014something that happened to someone else\u2019s family. That\u2019s not so true anymore. Sure, the change isn\u2019t even everywhere, but it\u2019s real. The numbers show just how much things have shifted: Indian insurers collected around \u20b920,096 crore in health premiums in 2014-15. Fast-forward a decade, and that figure has ballooned to nearly \u20b91,17,505 crore. Health insurance is now the biggest chunk of the non-life insurance business, even bigger than car or home insurance.<\/p>\n

But then, walk into a government hospital in Bihar or the heart of Madhya Pradesh, and you\u2019ll still see families selling off land or taking children out of school just to pay medical bills. Out-of-pocket health spending still makes up about 40% of India\u2019s total health expenses. That\u2019s an improvement from ten years ago, but it\u2019s still crushing\u2014or, at least, among the highest for a country this size. So, what\u2019s really going on? Is India getting covered, or are most people still one hospital bill away from financial disaster?<\/p>\n

A market that grew up fast<\/strong><\/p>\n

Most people in the industry agree: COVID-19 was the game changer. Before 2020, health insurance was something your employer handed you, or maybe something well-off families tacked on with their car policy. COVID turned that logic upside down overnight. Suddenly, a ten-day hospital stay could wipe out your savings\u2014and people started caring about coverage, fast. Insurers caught on too. They launched slicker apps, offered faster claim approvals, and made buying a policy as easy as UPI and a PDF on your phone. No paperwork, no long meetings, no persistent agent.<\/p>\n

The government played its part. Ayushman Bharat, launched in 2018, gives several hundred million Indians up to \u20b95 lakh a year for secondary and tertiary care. Then, in September 2025, the government removed GST on individual health policies. That\u2019s a nudge aimed at getting more people\u2014outside of corporate group covers\u2014into the market. It matters because most people with insurance still get it through their employer. Lose your job, and suddenly, you\u2019re uninsured again.<\/p>\n

Where the story turns<\/strong><\/p>\n

Take a typical small business family in Nagpur. The husband, late forties, has a \u20b95 lakh policy he picked up after his cousin\u2019s cancer treatment left the cousin wiped out. Stories like that are common now; fear, especially passed around at family gatherings, does more to sell policies than glossy ads ever could.<\/p>\n

But for every family that signs up, plenty never make it past the first conversation. If you\u2019re a daily-wage worker in Surat pulling in \u20b9500 a day, an annual premium of \u20b98,000 or \u20b910,000 isn\u2019t on the table. When it comes down to school fees, rent, or insurance, insurance loses. It\u2019s a wall of affordability that digital apps and smooth talk haven\u2019t broken. According to Mordor Intelligence, the biggest untapped markets are rural families, seniors, and people who need OPD coverage\u2014the groups insurance companies have the hardest time reaching.<\/p>\n

And let\u2019s not ignore trust. In May 2025, hospitals in Ahmedabad briefly stopped accepting cashless treatment for Star Health policyholders because of a spat over settlements. The service came back, but incidents like this are common enough that lots of first-time buyers are more suspicious than hopeful. Ask someone who\u2019s filed a claim, and you\u2019re likely to hear about endless back-and-forth, partial pay-outs, and paperwork headaches\u2014especially when you\u2019re at your most vulnerable. Monika Halan, a well-known personal finance expert, puts it plainly: the minute you need your insurer most is usually the minute your policy feels more like a fight than a safety net.<\/p>\n

The exclusions nobody reads until it\u2019s too late<\/strong><\/p>\n

And then there\u2019s all the stuff nobody reads until it\u2019s too late. Most plans won\u2019t cover pre-existing conditions for two to four years. So your average 55-year-old with diabetes gets insurance for the first time and finds out the thing he\u2019s most worried about isn\u2019t covered. As India\u2019s population gets older, this is only getting to be a bigger problem. Companies are tweaking things\u2014offering shorter waiting periods or chronic disease add-ons\u2014but premiums are still high enough for seniors that many just walk away and hope their savings will be enough.<\/p>\n

What actually moves the needle<\/strong><\/p>\n

The truth is, health insurance in India doesn\u2019t catch on because of celebrity endorsements or fancy apps. It spreads through fear and stories\u2014a neighbor\u2019s emergency, a cousin\u2019s big hospital bill. Online sales have made buying insurance easy\u2014a recent survey showed most urban Indians now buy online, not through an agent. But making it easier to buy doesn\u2019t fix the cost problem or the trust problem.<\/p>\n

Look at the insurance penetration rate\u2014it\u2019s still stuck at about 3.7% of GDP, even though health insurance is booming. That\u2019s way below the global average. The government likes to talk about \u201cinsurance for all,\u201d but there\u2019s a big gap between headline statistics and what actually happens when a family lands in the ER. Closing that gap doesn\u2019t just mean new products. It means insurance that actually pays when you need it, policies you don\u2019t have to read eighteen times to understand, and a process that feels less like a gamble and more like a real safety net.<\/p>\n

PNN Health<\/a><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Mumbai (Maharashtra) [India], July 25: Ten years ago, if you were trying to sell health insurance door-to-door in a small Indian town, you\u2019d mostly hear: \u201cWe\u2019ve never fallen sick badly … Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":57328,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[99],"tags":[680],"class_list":["post-57327","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-health","tag-health","entry"],"_links":{"self":[{"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/posts\/57327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/comments?post=57327"}],"version-history":[{"count":0,"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/posts\/57327\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/media\/57328"}],"wp:attachment":[{"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/media?parent=57327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/categories?post=57327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialtelegraph.in\/index.php\/wp-json\/wp\/v2\/tags?post=57327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}